Apple offset waning iPhone interest by posting stronger-than-expected Mac and Wearables sales when the tech giant reported its third quarter financials on Tuesday afternoon. Wall Street gave an initial thumbs up to the company’s performance, with Apple shares increasing 3% in early after-hours trading.
For the three months ending on June 30, representing the company’s third fiscal quarter, Apple reported $53.8 billion in revenue, edging past analyst estimates of $53.3 billion in sales; Apple also posted earnings per share of $2.18, narrowly surpassing projections of $2.10 EPS. Apple’s revenue increased 1% year-over-year.
Apple beat revenue expectations despite the decline of its trademark product. The iPhone brought in “only” $26 billion in Q3 revenue — dropping from about $29.5 billion in sales during the same period last year. The company stopped sharing how many iPhones it sold per quarter earlier this year. Apple is expected to unveil a new round of iPhones later this fall, as well as three new models with 5G support in 2020.
Also Read: Will Apple News Cannibalize Traditional Media the Way iTunes Did Music Labels?
Apple made up for the decline in iPhone sales with strong growth across its other sectors. Wearables, which includes the Apple Watch and Air Pods, posted $5.2 billion in revenue — easily trumping the $3.7 billion in sales the company reported during the same time last year. Services revenue — which includes sales of apps, movies and music, among other offerings — also increased 13% year-over-year to $11.4 billion. Mac sales also increased 11% year-over-year to $5.8 billion.
“This was our biggest June quarter ever — driven by all-time record revenue from Services, accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends,” Apple chief Tim Cook said in a statement. “These results are promising across all our geographic segments, and we’re confident about what’s ahead. The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products.”
Apple forecasted it would report between $61 billion-$64 billion in Q4 revenue.
Apple’s stock jumped to about $216.50 per share soon after its Q3 results were shared, putting the company within striking distance of passing its all-time high of $227.60 per share. If Apple’s gains hold through Wednesday morning, the company would be worth about $1 trillion again; Apple became the first company to pass the $1 trillion valuation mark last year.
Also Read: Why Apple's Supreme Court Loss Puts Tech Giant's Cash Cow at 'Serious Risk'
Apple’s cash hoard dropped more than 6% during Q3 to $210.6 billion. The company entered the quarter with about $225 billion in cash.
In June, Cook kicked off Apple’s annual developer conference with a sneak peek of “For All Mankind,” a space race drama set in an alternate history where the Soviets put the first man on the moon. It was the first trailer released for one of Apple’s upcoming series, ahead of its full content push later this year, and suggested the company wants its new slate of shows to be at the front of everyone’s mind when they think of the company. Apple TV+, the company’s new streaming service, will launch this fall.
Earlier this month, Apple beefed up its content library by grabbing the Samuel L. Jackson and Anthony Mackie-led flick “The Banker.” Based on true story of two African American entrepreneurs, “The Banker” follows Bernard Garrett (Mackie) and Joe Morris (Jackson), who try to circumvent the racial limitations of the 1950s by recruiting a working class white man, Matt Steiner (Nicholas Hoult), to pose as the head of their business empire while they pose as a janitor and a chauffeur to monitor their businesses.
Perhaps most notably this quarter, Apple’s chief design officer Jony Ive, who played an integral role in crafting trademark products like the iPhone and iPod, left the tech giant to start his own company. Ive had been with Apple for nearly 30 years, where he helped refine its sleek, minimalistic approach to product design. Along with the iPhone, iPod, Mac and Apple Watch, Ive also led the team behind Apple Park, the company’s $5 billion corporate headquarters in Cupertino, California that opened in 2017.
Also Read: Netflix's 'Competitive Moat': Can Streaming Giant Spend Rivals Like Disney and Apple Into Oblivion?
Apple said goodbye to another key cog in June, when the company officially killed off iTunes, breaking it up into three separate Mac apps — Music, Podcasts and TV. The trailblazing music and movies store’s death had been a matter of when, not if, for a while, though. The three apps had already been a mainstay on iOS for years.
One thing worth keeping an eye on as 2019 rolls on: The Supreme Court ruled against Apple in May, allowing an antitrust lawsuit against the company to move forward. The lawsuit claims Apple, by taking a 30% cut of sales from the App Store, leverages unfair monopoly power and forces apps to charge inflated prices.
The company will hold a conference call to discuss its earnings at 2:00 p.m. PST.
More to come…
